Phoenix Area Housing

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Phoenix area housing sales have gone up about 22 percent over the past month. Arizona Republic real estate reporter Catherine Reagor will tell us why.

TED SIMONS: COMING UP NEXT ON "ARIZONA HORIZON," WE'LL SEE WHAT'S BEHIND THE INCREASE IN NEW HOME SALES IN THE VALLEY, ALSO TONIGHT WE'LL MEET THE NEW POLICE CHIEF OF GLENDALE AND HIS NEW VISION FOR THE DEPARTMENT, AND WHAT'S NEXT FOR WHAT WAS A MAJOR SHOPPING MALL IN THE VALLEY. THOSE STORIES NEXT ON "ARIZONA HORIZON."

TED SIMONS: GOOD EVENING, WELCOME TO "ARIZONA HORIZON." I'M TED SIMONS. NEW HOME SALES WERE UP 22% IN THE PHOENIX AREA IN THE LAST MONTH. WHAT DOES THAT MEAN FOR THE LOCAL ECONOMY? WE HAVE OUR SENIOR REAL ESTATE REPORTER WITH THE ARIZONA REPUBLIC. GOOD TO SEE YOU.

CATHERINE REAGOR: GOOD TO SEE YOU.

TED SIMONS: WE HAVE HAD YOU SO MANY TIMES WHEN EVERYTHING IS PLUMMETING. NEW HOME SALES ARE UP?

CATHERINE REAGOR: IN THE PAST MONTH UP 22%. WE HAVE THE BEST MONTH WE HAVE HAD IN A DECADE. IT'S BEEN A LONG TIME COMING. THE NEW HOME BUILDING INDUSTRY HAS NOT RECOVERED.

TED SIMONS: WE ARE NOT TALKING ABOUT EXISTING HOMES. WE ARE TALKING ABOUT THE NEW HOMES. WHAT'S GOING ON?

CATHERINE REAGOR: HOME BUYERS ARE SMART. THEY SAW INTEREST RATES CLIMB. NEW HOME PRICES HAVE NOT CLIMBED MUCH, 2% LAST YEAR AND THE FORECAST IS BIG INCREASES, SO THEY JUMPED IN AND BOUGHT.

TED SIMONS: HOW MUCH HAVE INTEREST RATES INCREASED?

CATHERINE REAGOR: I REFINANCED LAST FALL. I GOT 3.5. IT'S 4.01. IT'S EXPECTED TO KEEP CLIMBING. THAT'S NOT BAD.

TED SIMONS: IS THAT THE KIND OF INTEREST RATE THAT HURTS SALES. WHEN INTEREST RATES GO UP, YOU THINK ABOUT BUYING.

CATHERINE REAGOR: INTEREST RATES ARE CLIMBING, PRICES ARE CLIMBING. A LOT OF THE LOTS THEY ARE BUILDING ON, MESA, GLENDALE, CHANDLER, GILBERT, PEORIA, THOSE LOTS, PEOPLE BOUGHT DURING THE CRASH AND THEY ARE FILLING UP. THE NEXT LOTS ARE MORE EXPENSIVE SO PRICES WILL GO UP.

TED SIMONS: LET'S TALK ABOUT WHERE THEY ARE BEING BUILT. WHERE?

CATHERINE REAGOR: SOUTHEAST POPULAR. MESA, CHANDLER, GILBERT POPULAR. WE ARE SEEING THE DEMAND STRETCH OUT TO PI NELL COUNTY. GLENDALE, SURPRISE, PEORIA, NORTH PHOENIX VERY MUCH. WE ARE SEEING THE DEMAND FROM THE HOME BUYERS STRETCHING OUT TO THE LEVINE. BUCKEYE, UP NORTH NEAR LAKE PLEASANT AND OUT OF MARICOPA, THOSE ARE BEING REVIVED.

TED SIMONS: IT SOUNDS LIKE A LOT OF PLACES THAT ARE HIT BY THE RECESSION ARE COMING AROUND AGAIN. ARE THERE WARNING SIGNS? WE HAVE HEARD THIS BEFORE.

CATHERINE REAGOR: BUILDERS ARE CAUTIOUS. IT'S TAKING LONGER TO BUY A HOME. THEY ARE RUNNING OUT OF LOTS BECAUSE OF THAT. THEY ARE BUILDING ON WHAT THEY CAN SELL. THE HOUSING CRASH BURNED EVERYONE. HOPEFULLY, WE HAVE LEARNED OUR LESSON AND ARE WATCHING THAT. STARTING TO SEE THE INCREASE AND DEMAND.

TED SIMONS: LET'S TALK ABOUT WHAT THEY CAN SELL. WHAT KIND OF HOMES ARE BEING BUILT? IN THE OLD DAYS, YOU WENT OUT THERE, ALL KINDS OF SPRAWL. THE HOMES LOOK THE SAME. ARE WE SEEING MORE VARIETY?

CATHERINE REAGOR: REMEMBER THE MANTRA, DRIVE UNTIL YOU QUALIFY FOR A HOUSE. WE ARE NOT SEEING THAT. WE ARE SEEING INFILL. MORE CONDOS. MORE COMMUNITIES OF ATTACHED HOUSING AROUND A COURTYARD, THREE STORY, LESS SPACE WHICH HELPS SAVE THE COMMUNITY URBAN FEEL, VERY MUCH SO. SEEING THE GATED COUNTRY CLUBS.

TED SIMONS: LESS UPKEEP AS WE GET OLDER AND TIRED OF THAT KIND OF BUSINESS.

CATHERINE REAGOR: AND THE MILLENNIALS THAT DON'T WANT THAT. THEY WANT TO LOCK AND LEAVE AND TRAVEL LIKE THE BABY BOOMERS.

TED SIMONS: WITH NEW HOMES ON THE UPTICK, WHAT'S IT DOING TO CONSTRUCTION JOBS?

CATHERINE REAGOR: WE LOST A LOT OF CONSTRUCTION JOBS AND WORKERS, MORE THAN 200,000 AFTER THE CRASH AND ISSUES WITH SB1070. BUILDERS AND CONTRACTORS ARE LOOKING VERY HARD TO FIND THE SKILLED LABOR THEY NEED. YOU HEAR ABOUT IT WHERE ONE HOME BUILDER GOES TO A LOT WHERE NEW HOMES ARE GOING UP. I'LL PAY YOU TWO DOLLARS MORE AN HOUR. IT'S TAKING LONGER TO BUILD HOMES. IT TOOK A COUPLE OF MONTHS, THEN STRETCHED TO SIX MONTHS. I HEAR IT'S GETTING BETTER. A LOT OF WORKERS WENT TO DENVER AND COLORADO AND THEY HAVE JOBS.

TED SIMONS: IF THERE IS A SHORTAGE OF SKILLED LABOR FOLKS, ECONOMICS TELLS ME THEY'LL MAKE MORE MONEY AND THOSE HOUSES ARE GOING TO COST MORE.

CATHERINE REAGOR: HIGHER LAND COSTS AND LABOR COSTS. WE HAVE NEW TARIFFS WITH LABOR FROM CANADA.

TED SIMONS: IS THAT AFFECTING NEW HOMES IN ARIZONA?

CATHERINE REAGOR: IT WILL START. I WAS TOLD THAT LAST WEEK. IT WILL IMPACT IT BECAUSE OF HIGHER LUMBER PRICES. WE SAW A SURGE OF SMART BUYERS. A NEW HOME, $300,000, 250 FOR THAT. GOING FARTHER OUT, YOU CAN GET A LOT IN A NEW HOME. THAT'S WHY THEY ARE POPULAR.

TED SIMONS: IF THERE IS MORE DEMAND FOR HOMES BRAND NEW, FURTHER OUT, WHAT ABOUT THE OLDER HOMES CLOSE IN? ARE THEY AFFECTED BY THE UPTICK IN NEW HOME SALES?

CATHERINE REAGOR: HOME PRICES ARE RISING CLOSER IN BECAUSE OF THE PULL. I HAVEN'T SEEN IT PULL AWAY. WE HAVE A STEADY POPULATION GROWTH. WE HAVE THE MARKET FOR NEW HOMES AND HOME SALES. FROM OUR PACE OF HOME BUILDING, I SEE NO SIGN WE ARE OVERBUILDING AND GETTING OUT OF WHACK.

TED SIMONS: LAST QUESTION. THE HIGHEST IN TEN YEARS. WE ARE NOT WHERE WE WERE DURING THE PEAK GO CRAZY YEARS.

CATHERINE REAGOR: WE ARE A THIRD. EVEN A NORMAL, HEALTHY MARKET WE ARE LESS THAN HALF.

TED SIMONS: LET'S KEEP AN EYE ON IT, SEE WHERE IT GOES. GOOD TO HAVE YOU HERE.

TED SIMONS: YOU ARE WATCHING "ARIZONA HORIZON." UP NEXT, WE MEET THE NEW POLICE CHIEF OF GLENDALE.

Catherine Reagor: Arizona Republic

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